Fiat struck gold in the UK with the 500. It's the second biggest market in Europe for the 500 I believe. Having that success with another model is going to be hard going, as they've seen with the new Panda, which sells next to nothing here by comparison. Their models do seem a bit expensive for what they offer in terms of kit and power, hence I suspect why the Panda now has what looks like being a permanent/semi-permanent 'Customer Saving' on it. As much as I really don't like VW Group products, they are (rightly or wrongly) trusted more in the UK than Fiat Group and some of their products do look pretty good value for money at a time when Fiat seems to be increasing prices. You're not gonna setthe sales charts alight with a strategy like that against someone like VW. Not in the UK, anyway.
My experience is that people who buy VWs wouldn't look twice at Fiats as they are perceived to be cheap, in all senses, and poor quality - and don't forget image! VW has image in spades, Fiat has the 500 and not much else.
However, at a time when PSA, Renault, General Motors and Ford have well-documented financial troubles, Fiat Group by comparison seem to be doing alright. Or if they're not, they're not saying anything about it. So perhaps the idea of selling a few cars at full price is better than selling loads at a discount. They certainly seem in no amazing hurry to add new models to the tiny Alfa, Jeep & Chrysler line-ups or to replace the aging Punto & Bravo & one would imagine a bit more obvious panic if there was trouble at mill, so maybe it's all just fine & dandy at Fiat Towers. Who knows.
The Fiat group has as many problems as everyone else. Fiat makes no profits in Europe, depending on Brazil and Chrysler in the US to balance the books. This is why Marrichone is currently battling the Italian unions in the courts in order to get them to be more flexible in their working practices. He has threatened to move corporate HQ to the US or, last week, Holland, where the tax regime is similar to the US. There have been threats to move all Fiat production outside Italy if the unions don't budge; at present the 500L and 500 are built in Serbia and Poland, and the Doblo is built in Turkey.
Fiat is still debating on what to do with Alfa. They still can't decide on a strategy, but the US wants rear wheel drive cars and they don't have a rear wheel drive chassis to adapt for a BMW 3 series competitor. But they are well aware that limping along with the Gulietta and Mito can't last forever. And the forthcoming sports car is a niche player.
The Punto is still viable in Italy, as is the little Lancia, but nowhere else, and Fiat knows that they have to appeal to a world market or fail. As for the Bravo, forget it, everyone else has
The French have just launched the Renault Captur and the Peugeot 2008, and VW and the rest have similar small crossovers coming. These will all put pressure on the 500L, which seems to be more expensive like for like already. I know all the makers are trying to go upmarket, where the profits are, but breaking in to a market held by VW and the Koreans, with their warranties, isn't an easy thing to do.
At this very moment Fiat is in the throes of very important reorganisation and it will be fascinating to see the outcome.
